Algeria: Soon a third listed stock

The Algiers Bourse has long been a shell, with only two listed companies, and both of those illiquid state-owned firms. Now private operator Alliance Assurances is set to list, and hopefully mark the start of a move to modernity on the market.

Alliance Assurances is the second-biggest private insurance company in Algeria, and boasts market share of 4%. The insurance market in Algeria is growing rapidly, at about 13% a year, and produced total turnover of €790m in 2008, relatively small when compared to that of South Africa, more than ten times as big. Public insurers still have market share of about 70%.

In an interview with El Watan, Alliance CEO Hassan Khelifati says that the purpose of the operation is to benefit from state measures to encourage listing (including a five-year tax holiday on profits from the operation), to raise new capital for development and to help revitalise the Algiers Bourse.

The offer will see 1.8 million shares floated at 830 DZD each, raising 1.5 bnDZD (€15.3m), a near-tripling of Alliance's equity. The tranches are as follows: 20% of the offering is reserved for Algerian individuals, 30% for Algerian companies, 10% for insurers and 10% for staff. Institutional investors, including foreigners, will fight over 30% of the operation. 

At the moment there are only two listed companies in Algeria: state pharmaceutical company Saidal and the El Aurassi hotel. Trading takes place twice a week, on Monday and Wednesday mornings for two hours. Average volume so far in 2010 was €80 000 and the float is €15m.

RICHARD J.  BROOK

Source: www.lesafriques.com